Tupperware Mounts an Overseas Pantry Raid
Known to millions of American households for its “burp-and-seal” plastic containers, Tupperware Corp. is retooling itself to focus on overseas sales by offering lunch boxes with chopsticks, stylish picnic items and ergonomic kitchen gadgets.
The Orlando-based company, which recently began trading on the New York Stock Exchange, aims to introduce a steady flow of new products tailored for individual markets, according to Tupperware Worldwide President Rick Goings.
In Japan, that means selling children’s lunch boxes with pull-apart chopsticks, and items such as chopstick rests, kimono holders and rice dispensers.
A different lunch box with Mickey Mouse kicking a soccer ball is produced for Latin American customers under a partnership with Walt Disney Co.
In Europe, Tupperware sells picnic sets featuring sleek styling to appeal to consumers who nibble on cheese and sip wine.
“What we want and what we’ve been achieving in the last year is that at least 20% of our sales come from new products,” Goings said in a recent interview. “That’s how we will measure success.”
American customers, who have already filled their cupboards with Tupperware plastic bowls and lids, can expect to see more kitchen gadgets designed for aging baby boomers.
The company recently introduced a $14.99 ice cream scoop for the U.S. market that has an ergonomically designed handle and features a bladed zinc scoop to extract a perfectly-rolled serving of ice cream. In a similar vein is Tupperware’s new $4.99 “Piece ‘O Cake Slicer” that uses a plastic form with sharp edges to serve uniformly sliced cake.
Under attack by plastics powerhouse Rubbermaid Inc. in its home U.S. market, Tupperware has focused on overseas sales, which last year provided 85% of its $1.36 billion in revenue and all of its growth.
The strategy has won Tupperware fans on Wall Street.
Merrill Lynch analyst Deepak Raj, who initiated coverage of Tupperware this week with an “accumulate” rating, said his long-term expected earnings growth rate was 11%.
“We believe that Tupperware can generate above average long-term revenue growth through further geographical expansion, growth in its distributor network and existing markets and continued product line expansion,” he said.
But analysts say the outlook for Tupperware sales is cloudy in Europe, Africa and the Middle East. Last quarter, Tupperware’s sales in those areas fell by 15.3% from the year earlier.
In the last 15 months, archrival Rubbermaid bought plastics companies in Poland and France.
“We consider Rubbermaid a nonplayer in Europe,” Goings said. “Our German business had a rocky start coming out,” he said, adding that that business has recovered. “They’ve had a good March, April, May. Our European business is going to have a nice second quarter.”
Of course, Tupperware still focuses on direct sales of its best known products--sealed food containers that have been known to preserve a head of lettuce for as long as a month.
The burp-and-seal plastic dishes initially introduced by chemical engineer Earl Tupper 50 years ago have become American consumer icons and appeared in museums far and wide, including the Smithsonian Institution in Washington and the Victoria and Albert in London.
U.S. sales have fallen 37% in nine years, although overall sales grew at 6% each year from 1989 to 1995 and operating profits grew 15%.
Tupperware plans to build on its international strength by expanding into new markets. The company manufactured its first products in China last week. In India, Tupperware just received government approval for a wholly owned operation.
By the fourth quarter, Tupperware will be in Turkey.
Latin America has been Tupperware’s fastest-growing region, Goings said.
“We declared war on the lunch-box business. We want to own the lunch-box business,” said Goings, who formed a partnership with Disney to make lunch boxes and other kids’ products for Latin consumers under the name “TupperMagic.”
The Mickey lunch boxes and other products were introduced in five Latin countries between February and May. Within weeks, each country was sold out of a year’s supply, he said.
Goings joined Tupperware from Avon Products in 1992, as the company struggled with declining U.S. sales and the decline of the Tupperware party as a social outlet for women.
He touted the company’s public offering last month with a mock “Tupperware Party” on the balcony of the New York Stock Exchange. But the company is changing its home parties to accommodate working women with 15-minute workplace parties.
Goings also said he wants to simplify distribution so managers can focus more on recruiting and training. He plans to increase the U.S. sales force, now about 100,000, or about one-eighth of Tupperware’s worldwide dealers.
Although it was not exactly a corporate decision, sales people no longer use the word “burp” when explaining how to use the famous Tupperware lids.
Colleen Staab, a sales manager hosting a party in Orlando last week, explained to a group of women, “You whisper the air out of the container. . . . We don’t say burp anymore. It’s rude.”
